The Naturgy Meeting approved the annual results and endorsed the management of its Board in the first year of its new Strategic Plan
- The shareholders of Naturgy approved the individual and consolidated accounts for the 2018 year, which was marked by a complex macroeconomic environment. During the year, the energy company unveiled the first results of the implementation of its Strategic Plan, which was launched in June of last year.
- The General Meeting endorsed the work of the management team in its first year at the helm of the company, during which time Naturgy improved its ordinary profits and generated cash flow, thanks to the progress of the business and the sale of the assets referred to in the Plan, which sets out to increase its asset base, reduce debt and remunerate shareholders.
- The Meeting approved a total dividend of €1.30 per share against 2018 results, showing a 30% increase over 2017. On 20 March, the third payment will be paid out with a complementary dividend of €0.57 per share.
- The shareholders approved a capital reduction by redemption of up to 19 million of the company’s treasury stock by 30 June. This measure is the result of the share buy-back programme, which forms part of the Strategic Plan and complements the payment of dividends as part of the total shareholder remuneration.
- Those present were also informed of the modification of the regulations of the Board of Directors and its Committees to further simplify corporate governance and increase the step-ups to help improve the efficiency of the company’s structures.
- The General Shareholders’ Meeting ratified the appointment of Scott Stanley as Proprietary Director (at the proposal of GIP), replacing William Woodburn. Scott Stanley will also form part of the Appointments and Remuneration Committee.
The President of Naturgy, Francisco Reynés, presided over the company’s Ordinary General Shareholders’ Meeting, which was held today in Madrid, where the shareholders approved the results, along with the corporate management report for the 2018 year.
The Meeting similarly approved a total cash dividend of €1.3 billion on the profits of 2018, as set forth in its current Strategic Plan. This figure translates to the cash payment of €1.30 per share (30% more than in 2017). Of this sum, the company already paid out €0.28 in the month of July and another €0.45 in November. Naturgy will additionally be paying out a complementary cash dividend of €0.57 this month of March.
The shareholders also approved a capital reduction through redemption of up to 19 million company shares, by 30 July, within the share buy-back programme that was implemented following the launch of the Strategic Plan. This programme aims to increase the total shareholder remuneration when there is a lack of inorganic investment opportunities that fit into Naturgy’s strategic lines for growth. Until 1 March, the company bought back €200 million in shares for this purpose.
“2018 was a relaunch year. A year in which Naturgy defined the bases of its transformation to become an international benchmark; a year in which we presented a route map that will take us into 2022, with a clear plan of action based on our four value-creation pillars.
We are also launching a new shareholding structure; we’ve renewed the Board of Directors and we’ve implemented a new Board structure. These milestones of this year particularly reveal our steadfast commitment, which is expressed in the Strategic Plan 2018-2022”, Francisco Reynés stated before the shareholders.
The president of the company explained the major milestones in Naturgy’s activity for the year, which included the renewal of the gas supply agreement with Sonatrach and the favourable ruling of the ICSID for the Egypt dispute, with standardisation in the UK. In any case, the company is upholding its desire to reach a full-scale agreement, to reinstate the value of the investment.
Among the financial milestones, Reynés pointed out the financial health of the business, which showed an ordinary net profit of €1.245 billion (+57%) and an ordinary EBITDA of €4.413 billion (+12%) at the close of the year. Nevertheless, the company unusually showed consolidated accounting losses of €2.822 billion, stemming from an asset value adjustment of the generation of conventional electricity in Spain and an adjustment of its goodwill value, primarily.
The president ensured the shareholders that the figures for 2018 “show a positive trend in our ordinary activity, yet it is in the upcoming years that we will see a crystallisation of greater value and an improvement in the results as we move forward in the execution of our strategic lines”, he pointed out.
The president explained to the shareholders the evolution of the efficiency plan, which aims to reduce annual operating expenses by €500 million euros by 2022. Hence, in 2018, the company’s progress exceeded expectations and closed the year with a recurring annual efficiency of €114 million. He also underscored the considerable cash flow generation thanks “to the positive trend of the businesses and divestments set forth in the Plan, which primarily aim to stimulate growth, reduce debt and remunerate the shareholder”, he affirmed.
NTGY, a stock that is going up
The upward trend of the share value in 2018 was highlighted at the meeting. The president pointed out that the total ROI for the shareholders was 23.1% in 2018. “Yet further proof of the clear commitment of this company to provide value and to clearly remunerate its shareholders”, asserted the president, who also reminded those present of the commitment to a minimum annual increase of 5% in shareholder remuneration by 2022, in keeping with the new Strategic Plan.
The Shareholders’ Meeting also approved the Long-Term Incentive for company executives, which was approved by the company within the Strategic Plan. With this plan, which is a first in companies listed on the stock exchange, Naturgy directly aligns the executives’ remuneration with the interests of its shareholders and links long-term remuneration exclusively to the total ROI (dividends paid out and increase in the value of the shares) in the period in question.
Modified regulations and change in the Board of Directors
The Ordinary General Meeting moreover approved the management of the Board of Directors, the remuneration policy for the board members of Naturgy for the 2019-2021 term and the plan for the transfer of company shares to Group staff, among other items on the agenda.
Those present were similarly informed of the change in the regulations of the organisation and operation of the Board of Directors and its Committees. From now on, both the Auditing Committee and the Appointments and Remuneration Committee will have a majority of independent members, accounting for four of the seven, in each case. With these changes, the company is complying with the recommendations for better practices in corporate governance.
The Meeting ratified the appointment of Scott Stanley (at the proposal of GIP) as Proprietary Director, following his previous appointment by the Board of Directors on 30 January, taking the place of William Woodburn. Stanley will also form part of the Appointments and Remuneration Committee.
The General Shareholders’ Meeting was attended by approximately 750 people and reached a quorum of nearly 85%.
Spain, Corporate, General Shareholders’ Meeting